Iron ore price rises on firmer steel outlook, but trade tensions cap gains
Lower Chinese steel product inventory driven by robust exports also supported iron ore prices above $100/t.
Today’s Gold session reacted strongly to The People’s Bank of China’s surprise announcement to raise its benchmark one year lending and deposit rate by .25 basis points. Anytime you mention rates hikes you’ll see gold and silver tumble…
China’s experiencing historic high prices in many of their commodities which is the justification for the unexpected rate hike. Today’s avalanche sell off had gold bugs ducking for cover as the technically overbought gold market dropped as low as $1332.00 during the day session. The session covered a very choppy and volatile $39.20 range and settled $36.10 lower on the day. With the wedding and festival season in full swing in the Asian sector this mammoth sell-off may be seen as another “BARGAIN HUNTING” opportunity. This scenario has been the trend for the past 6 months.
Diwali “FESTIVAL of LIGHTS” will be held on November 5th is known for the giving and receiving of gifts to family and friends primarily gold and silver. There is a long tradition of giving the gift of gold in India. It has been estimated that 12% of all refined gold throughout history is in Indian households. Presently they are the world’s largest consumer of gold accounting for approximately 20% of the world’s consumption.
Other data today was well over shadowed including the very troubling state of home foreclosures. The housing sector coupled with the high unemployment is the main drag on this economy and in my opinion should be this nation’s number one priority… These record foreclosures have hit every state hard and certainly will affect lending institutions as well as the overall economy.
MY SWING NUMBERS 10/20…December Gold
RESISTANCE # 2…………$1386.00
RESISTANCE # 1…………$1362.00
PIVOT ……………………..$1347.00
SUPPORT # 1…………….$1322.00
SUPPORT # 2…………….$1307.00
Mike Daly / Gold Specialist
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